Are promotional goods on Black Friday subject to value-added tax in Vietnam?
What is Black Friday? Are promotional goods on Black Friday subject to value-added tax in Vietnam?
- Black Friday is a major shopping day occurring on the Friday immediately after Thanksgiving in the United States. This day usually falls towards the end of November and is considered the start of the Christmas shopping season. On Black Friday, many stores and e-commerce websites offer deep discounts to attract customers.
As per Article 2 of Circular 219/2013/TT-BTC, the subjects liable for tax include:
Subject to Tax
The subjects liable for value-added tax (VAT) are goods and services used for production, business, and consumption in Vietnam (including goods and services purchased from organizations, individuals abroad), except for those not subject to VAT as guided in Article 4 of this Circular.
According to the above regulation, except for promotional goods that are not subject to value-added tax as specified in Article 4 of Circular 219/2013/TT-BTC, all remaining promotional goods not subject to a fee on Black Friday are subject to value-added tax.
Are promotional goods on Black Friday subject to value-added tax in Vietnam? (Image from Internet)
How is the VAT calculated for promotional goods on Black Friday in Vietnam?
The calculation of VAT on promotional goods is stipulated in Clause 5, Article 7 of Circular 219/2013/TT-BTC as follows:
In case promotional goods on Black Friday have been registered for promotion under the provisions of Article 101 of Commercial Law 2005:
- For products, goods, or services used for promotion as prescribed by commercial law, the taxable price is determined to be zero (0)
In the case of promotional goods on Black Friday that have not been registered under the provisions of Article 101 Commercial Law 2005:
- If goods or services used for promotion are not implemented according to commercial law, they must declare and pay taxes as goods or services used for internal consumption, gifts, or donations.
What are the invoicing regulations for promotional goods on Black Friday in Vietnam?
According to Clause 1, Article 4 of Decree 123/2020/ND-CP, the issuance of invoices for promotional goods on Black Friday is regulated as follows:
- When selling goods, providing services, the seller must issue an invoice to the buyer (including cases of goods or services used for promotion, advertising, samples; goods or services used as gifts, donations, salary substitutes for employees, and internal consumption excluding internal goods circulation for continuing production processes; issuance of goods under lending, borrowing or returning goods forms) and must fill in all contents as instructed in Article 10 of Decree 123/2020/ND-CP, in case of using electronic invoices, they must follow the standard data format of the tax authority as regulated in Article 12 of Decree 123/2020/ND-CP.
The invoice content for promotional goods is regulated according to Points b and đ, Clause 6, Article 10 of Decree 123/2020/ND-CP:
- VAT rate: The VAT rate shown on the invoice is the VAT rate corresponding to each type of goods or service according to the provisions of VAT law.
- If the business establishment applies commercial discounts to customers or promotions according to the law, the commercial discount, promotion must be clearly stated on the invoice. The determination of the VAT taxable price (total amount without VAT) in cases of applying commercial discounts or promotions is carried out according to the VAT law.
What are regulations on registration content for promotional programs on Black Friday 2024 in Vietnam?
According to Clause 5, Article 19 of Decree 81/2018/ND-CP, the registration content of promotional programs for no-fee promotional goods is regulated as follows:
- Name of the business implementing the promotion;
- Name of the promotional program;
- Promotion implementation area (provinces, cities where the business holds the promotion);
- Form of promotion;
- Goods or services being promoted;
- Goods or services used for promotion (prizes, gifts);
- Promotion implementation period;
- Customers of the promotional program (promotion beneficiaries);
- Prize structure and total prize value of the promotional program;
- Detailed content of the promotional program (rules of the promotional program);
- If multiple businesses coordinate to implement a promotional program, the registration content must clearly state the names of the participating businesses, specific participation content, and responsibilities of each participating business.
